Business

Eurozone investor mood stops nosedive in August

cde.news desk 7 August 2023, 12:20 · 1 min read

epa04543745 Euro sign at the Danske bank in Vilnius, Lithuania 31 December 2014. Lithuania will become the eurozone's 19th member on 01 January 2015. The long-planned move will integrate the former Soviet country more closely into the EU at a time when relations with Russia - its largest trading partner - are being tested by events in Ukraine. EPA/VALDA KALNINA

BERLIN, Aug 7 (Reuters) – Investor morale in the euro zone unexpectedly rose in August, ending three consecutive months of decline as inflation has lost some of its explosive power, but there are no signs of a lasting turnaround in sentiment, a survey showed on Monday.

Sentix’s index for the euro zone rose to -18.9 points in August from -22.5 in July, beating expectations of analysts polled by Reuters of a further drop, to a reading of -24.3.

Germany in particular has become “the sick man” of the euro zone and is weighing heavily on the region, said Sentix managing director Patrick Hussy, with investor morale in Europe’s largest economy falling to its lowest level since October 2022.

The subindex for future expectations in the euro zone rose 7.3 points to -17.3, which Hussy attributed to easing in the expected rate of deterioration rather than positive sentiment.

The “more lenient view” of the next six months is because investors see the issue of inflation as losing some of its explosive power, said Hussy, though there are not yet signs that the situation will continue to head in the right direction.

“The economy in the euro zone remains in recession mode. There can therefore be no joy about this development,” he said. The poll of 1,202 investors was conducted between Aug. 3-5, according to Sentix.